Economics

A pair of releases this morning show that retail spending and industrial output expanded in August, signaling that some key components of freight demand continue to grow at a healthy pace in the 3rd quarter.

Data from LinkedIn’s monthly workforce report shows that hiring in the transportation and logistics sector has continued at a strong pace throughout the last year. While this reinforces much of what has been reported through government statistics, LinkedIn is able to leverage its unique social media data to discover new trends about labor markets in the economy.

Data on producer prices shows that overall inflation pressure eased further in the 3rd quarter, declining for the first time in 18 months.  Trucking prices also calmed during the month, as big declines in long-distance trucking and LTL rates offset rising rates among local carriers.

U.S. job openings rose in July to a new record, adding to signs of labor-market tightness that may push wages higher. Within the transportation and logistics sector, openings continue to outpace hiring as businesses are finding considerable difficulty trying to fill positions.

Probably to no great surprise to attendees in the room, American Trucking Associations’ Chief Economist Bob Costello painted a very positive picture of the current and near-term freight environment during the ATA’s 2nd Annual Economic Summit last week in Washington, DC.

Job growth continued its remarkable pace in August, and data on hourly earnings show that wage growth is advancing at the fastest pace in over nine years. Strength in the overall labor market continues to spill into the trucking industry, which added jobs for the 11th time in 12 months.

Survey data from the manufacturing sector improved significantly in August, in a sign that activity continues at a strong pace after robust growth in the 2nd quarter.

A package of weak data on both housing starts and home purchases indicates that housing and construction remains one of the few areas of weakness in the economy in the 3rd quarter. This has put some downward pressure on freight demand, as the movement of building materials, furniture, and appliances is influenced by the strength of the housing market.

A pair of releases this morning show that retail spending and manufacturing output continued to advance in July, signaling that some key components of freight demand remain on solid footing in the 3rd quarter.

Schneider National became the latest carrier to announce that it has benefited financially from the strong pricing and capacity squeeze when it announced its second-quarter operating revenues were up 15% year-over-year.

Growth in the US economy improved considerably in the second quarter of the year, as a rebound in consumer spending helped drive the strongest quarter of growth in nearly four years.

Demand in the economy continues to grow at a solid pace at the start of the 3rd quarter, but a myriad of government survey results suggests that trucking capacity and concerns over tariffs have limited the performance of several sectors.

Recent increases in oil prices have revived some debate over the effect that oil has on the economy and freight markets. While evidence suggests that the recent increase has helped growth, there are some limits to the benefit that the market can gain from higher oil prices.

Data on producer prices shows that overall inflation pressure continued to heat up in the economy, as gains in service prices helped to push up.  Trucking prices surged again in June, as part of an overall wave of rising transportation costs in the economy.

Job growth continued at an impressive pace in June, beating expectations for the second consecutive month.  Trucking hires also made significant strides during the month, but increased competition from within transportation and other competing industries will remain a challenge going forward.

Survey data in both the manufacturing and service sectors continued to point to strong economic growth at the end of the 2nd quarter. Details in the survey responses continue to suggest that high transportation costs, labor shortages, and tariff uncertainty remain significant issues in the economy.

Both Dry Van Weekly Barometer and Reefer Weekly Barometer are predicting stronger contract pricing in coming months.

The report examines economic trajectory through employment and GDP per capita measures of the 300 largest metro areas in the world that now account for nearly half of all global output.

Truck tonnage rose for the second consecutive month in May, as improving economic conditions and gains in hiring have helped trucking performance.

The job openings rate in the overall economy hovered at record highs at the start of the 2nd quarter, as companies across industries continue to struggle to find workers. Results from the transportation sector show an industry facing a significant challenge, and wages will likely face additional pressure to rise in upcoming months.

Candid conversations with leaders in the logistics/truck freight brokerage industry.

Results from the Federal Reserve’s Beige Book suggest that manufacturers have shrugged off tariff concerns and are enjoying stronger growth in the 2nd quarter. Labor shortages remain an issue however, broadening beyond the trucking industry.

A panel of financial experts were mixed when asked whether the industry would see higher spot rates one year from now, but continued capacity issues was not in debate.

Cashflow Corner presented by TriumphPay …If you’ve fueled up your truck recently, you know that the cost is climbing. Fortunately, there are some driver behaviors that can be changed to minimize fuel usage.

Output from the nation’s industrial sector climbed for the third consecutive month, as broad gains across industries helped compensate for a lull in auto production. This serves as yet another sign that freight demand will remain solid in the 2nd quarter.

Retail activity improved again in April, helping to reinforce the idea of stronger consumer spending in the 2nd quarter. This should help sustain freight demand as retailers look for inventory replenishment and last mile residential delivery services

Cashflow Corner presented by TriumphPay …One of the most costly tasks for small companies is chasing down accounts for payment, which is why many smaller fleets and owner-operators turn to factoring companies.

Job openings pushed to a fresh record high at the end of the 1st quarter, indicating that labor market conditions remain healthy in the overall economy. The openings rate in the transportation sector continues to outpace the rest of the economy, and the pace of hiring provides further evidence that the industry is struggling to find workers.

The industrial real estate prices have been up for a long time and if market trends are to be believed, they could be climbing for the next few years.

Economic conditions as they relate to freight generally improved during the month. With a few notable exceptions, most of the data released in April (largely covering March activity) either met or exceeded expectations and signal that freight demand will likely stay strong going forward.

Truck tonnage fell for the second consecutive month despite generally solid economic conditions. Responses from survey data suggests that the freight is out there, but capacity is preventing tonnage growth

Sales of single-family homes improved for the 2nd consecutive month in a sign that housing activity is beginning to accelerate at the start of spring. This, in turn, should boost freight demand for building materials, furniture, and appliances as households move in and settle.

Responses from the Federal Reserve’s Beige Book on regional economic conditions show that recent tariffs and capacity issues in freight are starting to pressure businesses.

Positive news from both manufacturing and construction sectors, as gain in each help drive up freight demand in the economy

Retail sales rebounded in March after declining in each of the previous three months. This rebound is a return to normal for the retail sector after some volatility in spending following the hurricane season.

Job growth has improved since the start of the year in the trucking industry. While this is strong step in address the driver shortage, the industry will soon find itself having to compete long-term with other industries desperately searching for skilled labor.

Data from the Producers Price Index showed that prices for trucking services remain high, and a spillover in demand may be causing a surge in intermodal rates.

Cashflow Corner presented by TriumphPay …When a customer refuses to pay their bill, or simply delays paying it, brokers and carriers alike can be stuck with a lack of cash on hand and few options.

Trade war fears have caused increased volatility in stock markets over the past month. However, worries over a deep recession caused by protectionism appear overblown for now. The challenge for transportation companies will be less about a collapse in activity and more about adjusting to the new reality.

When starting your trucking company, seeking out the advice of family and friends may seem like the right approach, but it can sometimes backfire.

Construction spending in the economy remains essentially unchanged since the start of the year, as the sector continues to disappoint after a solid 4th quarter. This has implications for flatbed carriers and dry vans, as weakness in construction and home building affects freight demand.

A monthly synopsis of events and results in the macroeconomy from the past month and a discussion of implications for freight markets going forward. Results released in March were generally more favorable than the previous month and suggests that freight demand should remain strong going forward.

As Phil Wilt, the president and COO of American Central Transport said, “I had heard about a driver shortage for the 12 years I’ve been in the industry. It’s finally arrived.”

Regional manufacturing data from the Dallas and Richmond Fed suggests that manufacturing activity has cooled in March as the impact of tariffs has affected output

Cashflow Corner presented by TriumphPay …There are several basic mistakes owner-operators tend to make and each can put their business in jeopardy.

Factory orders for durable goods bounced back after a large decline in the previous month. Gains during the month were broad based in a sign that freight demand should be solid in upcoming months

The ATA’s truck tonnage index fell 2.6% in February, and evidence from rail traffic data suggests that shippers are shifting modes for some freight

The Fed is expected to raise rates again this week. This move has been communicated for several months, but what the Fed says about future increases could have significant implications for freight markets and carriers

Arrive Logistics will host a webinar on March 29 with use case examples and tips on how shippers can reduce their shipping costs.

Atlanta-based supply chain consultancy firm Chainalytics and UK-based ocean shipping consulting firm Drewry Supply Chain Advisors have officially formed a partnership through a joint venture, The Ocean Buying Group.

Inventories picked up in January, but low inventory/sales ratios mean that carriers with remain under pressure to hit tight deadlines.

Job openings reached a record high in the January JOLTS data. Results were especially pronounced in the transportation and warehousing sector, where openings surged and hiring failed to keep pace

If you want to make a million dollars, all it takes is a little hard work and creating something that has value.

Being an owner-operator or small fleet owner requires more know-how than just driving a truck. Kevin Rutherford explains.

The NFIB Small Business Optimism index jumped near its all-time high in February, and details of the report suggest that this optimism is beginning to translate to economic activity

The current level of freight strength would be notable if it were June, September, or October, but it’s not. It’s February data. It is impossible to predict exactly how long this will last, but at least through 2018 we expect capacity to remain tight. 

The economy added over 300,000 jobs in February, and trucking hires improved for the fourth consecutive month

Persistance is important in reaching any deal, but delivering on what you promise is equally important.

Truck orders and tonnage both posted strong gains in January suggesting there is no immediate end coming to the good times.

From a merchant perspective, Shipping with Amazon would provide increased competition in the shipping space, while also providing Amazon with more data about the products people are buying.

Signs are pointing to a new reality: self-driving trucks will help the industry. And the people who keep it running will continue to show us why they’re such an important part of the supply chain.

Current financial news headlines are full of stories about inflation and the resurgence of inflation in the U.S. economy.  

Retail sales showed unexpected sluggishness in both January and December, which was revised downward.

Markets are meant to contain some volatility. While 1,000 point drops in the Dow are unsettling, it still makes for an index whose value is greater than 24,000. Such a move is only around 4% — common enough as far as such corrections go.

Despite all this good news, an underlying problem remains for many truckers – getting paid. There are still some shippers that are dragging their feet when it comes to settling their bills, and that leaves carriers short of cash.

With the ELD mandate enforcement date behind us, owners of trucking companies can now focus on the next sweeping change to impact their business; implementation of the Tax Cuts and Jobs Act that was signed into law by President Trump on Dec. 22, 2017.

In the last few weeks, there has been a lot of confusion in the driver community regarding the per diem, which has been eliminated for company drivers under the new Republican tax plan.

On Friday, the U.S. Department of Labor published a Notice of Proposed Rulemaking that expands the ability of associations to offer health insurance plans.

The latest weekly and monthly DAT Trucking Freight Barometers are continuing to surge strongly into even more positive territory, and proving our September prediction that “the ‘fall surge’ is happening for the first time since 2007,” has come to pass.

With third-quarter GDP coming in at 3.2% growth and fourth-quarter GDP also expected to best the 3% mark, which would be the third consecutive quarter of 3%-plus growth, and a newly minted tax plan promising to start moving the economy forward, times would appear to be ripe for trucking.

The days of drivers carrying around multiple credit cards to handle life on the road are quickly disappearing. Once, drivers might have a company credit card for expenses, a fuel card to pay for fuel, and even their own card for non-job-related expenses, but that is all changing as innovations in fuel cards might be making the company credit card obsolete.

The Dow Jones U.S. Trucking Index (DJUSTK) surged to an all-time high for trucking today, and ended up at growing to 4.39 for the day.

Everyone who is even remotely aware of the trucking industry in the U.S. knows that the ELD rule goes into effect on Monday. Time will tell, but if there are not massive numbers of trucks parked on the side of the road, and shippers are actually able to find trucks to move loads, we will not be surprised. 

Recently, Mexico shifted into a supply-and-demand based pricing structure for its fuel markets, ditching the old system where the government set the fuel price through state-owned oil company Pemex as it seeks to attract more U.S. investment.

By the first week of December, the DAT weekly spot market price for dry-van loads had reached $2.09 (including fuel surcharge) or almost 30% higher in just 9 months. This is an extraordinary, but what is more extraordinary is the fact that the trucking marketplace is more than 3 times the size of the Bitcoin market capitalization, which has grown 22% in 12 months.

Last-minute efforts to delay or stop the electronic logging device rule (ELD) are continuing, but it may be too little, too late unless President Donald Trump throws a Hail Mary.

Daimler’s Mercedes-Benz Vans brand has introduced its third-generation Sprinter van at an event in Stuttgart, Germany. The van features many of the iconic attributes it always has, but has added new connectivity to further improve its utilization.

Fuel surcharges have a long history in the transportation industry, dating back to the Arab oil embargo in 1973 by most accounts. While the early days of surcharges were straightforward to calculate, that is no longer true, and they may not even be the best way to manage costs anymore.

Fleets do not have to be stuck paying high insurance premiums as there are a number of choices they can make to lower their risk profile and cost. Here are 10 ways to help do that.

Last week, FreightWaves published a commentary suggesting that solving the driver shortage may be as easy as raising pay – a supply and demand issue. We got many comments on that, including from Stifel Equity Research’s John Larkin, who said economics is not the only issue at play.

The industry loves to throw around the term “driver shortage.” But what we really face is an economic opportunity shortage. Fix this and you will fix the driver shortage problem. 

For years we’ve heard arguments about how better supply chain visibility will lead to a logistics environment that is easier to predict, plan, and manage. But sudden changes can quickly derail those plans.

The more individuals participating in a marketplace, and the more money that is being transacted in that marketplace, the more predictive that marketplace becomes. That’s why trucking remains one of the best indicators of economic activity. Here is what the weekly DAT Barometers for dry van, reefer, and flatbed are saying.

The Alliance for Driver Safety & Security, aka the Trucking Alliance, has adopted four technologies that the AAA Foundation for Traffic Safety says is critical to reducing large truck crashes.

Even with rates rising – both contract and spot – and capacity tightening, attracting drivers still remain a primary concern for fleets. Driver pay is increasing, but outside influences are still hurting the recruitment efforts.

There were a number of companies that presented new and updated products this past week at the American Trucking Associations’ MCE 2017 conference in Orlando, FL. Here is a rundown of some of those products.

Blockchain offers a number of opportunities within freight management to improve cash flow. Pay per mile insurance coverage is one new concept, but that same philosophy can be applied to vehicle leases, perhaps changing the way fleets pay for their vehicles.

Managing any small business can be stressful. The fact is many small businesses fail. The number one reason for small business failure is the lack of proper cash flow management, according to U.S. Bank. That’s why it’s so important to learn how to manage your cash when times are good. 

President Donald Trump took his case for tax reform to the American people on Wednesday night – specifically the trucking community – at an event in Harrisburg, PA.

Rates are going up, but how can your carrier grab the largest increase possible? There are many things to consider when it comes to rates, but it all starts with knowing your own costs.

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (the Update). The Update represents the first comprehensive overhaul in lease accounting in approximately 40 years.

Spot rates continue to climb and capacity continues to shrink, and now experts are predicting a strong holiday retail season. Could the good news for carriers get any better?

Some large carriers can easily accumulate over $1 million a month in toll payments, said Drew Anderson, director of carrier relations for HELP, Inc. Because of that, there is a need to help them – and any other fleet large or small that deals with tolls – better manage their tolling data and payments.

The momentum in both contract and spot rate increases should feel like a rocket ship. For the first time in years, fleets will enjoy pricing power 

The first two weeks in after a bankruptcy filing of a customer are critical to ensuring you get paid. Trucking companies, especially smaller carriers and owner-operators, are often at the end of that line – the so-called unsecured creditors. But it doesn’t have to be that way.

When a major retailer such as Toys “R” Us files for bankruptcy, a long line of creditors comes knocking. Trucking companies, especially smaller carriers and owner-operators, are often at the end of that line – the so-called unsecured creditors. But it doesn’t have to be that way.

Urbanization has been a constant since industrialization, but with the technology innovations of the past thirty years- that is changing. 

Harvey is the kerosene to accelerate the trends towards a major capacity crunch in the truckload industry. With as much as ten percent of capacity being impacted, combined with surpluss demand coming from relief and rebuilding- the truckload market capacity is expected to be super tight 

Even as the industry steps up to help, dedicating thousands of trucks and millions of cubic feet of capacity to relief efforts, an analysis from FTR says that approximately 7% of the industry has been affected already and some of that will be affected for weeks.

Calling it the “most innovative, most exciting trucks from Volvo in 20 years,” Volvo Trucks North America officially took the wraps of its updated VNL family of trucks.